-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VAFQ7RsmmQBW6hn4MnpLbLkdbqqrIO/QBHZVDl71rHUHv0WAzTmX3a0Ntnt7Nk3s NGcitVjGeEv1cYniYACwoA== 0001144204-09-033854.txt : 20090622 0001144204-09-033854.hdr.sgml : 20090622 20090622172653 ACCESSION NUMBER: 0001144204-09-033854 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20090622 DATE AS OF CHANGE: 20090622 GROUP MEMBERS: CITADEL ADVISORS LLC GROUP MEMBERS: CITADEL DERIVATIVES GROUP LLC GROUP MEMBERS: CITADEL DERIVATIVES TRADING LTD. GROUP MEMBERS: CITADEL EQUITY FUND LTD. GROUP MEMBERS: CITADEL HOLDINGS I LP GROUP MEMBERS: CITADEL HOLDINGS II LP GROUP MEMBERS: CITADEL INVESTMENT GROUP II, L.L.C. GROUP MEMBERS: CITADEL INVESTMENT GROUP, L.L.C. GROUP MEMBERS: KENNETH GRIFFIN GROUP MEMBERS: WINGATE CAPITAL LTD. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: E TRADE FINANCIAL CORP CENTRAL INDEX KEY: 0001015780 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 942844166 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-50061 FILM NUMBER: 09904131 BUSINESS ADDRESS: STREET 1: 135 E. 57TH STREET CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 6503316000 MAIL ADDRESS: STREET 1: 135 E. 57TH STREET CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: E TRADE GROUP INC DATE OF NAME CHANGE: 19960531 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CITADEL L P CENTRAL INDEX KEY: 0001027745 IRS NUMBER: 364111741 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 131 S. DEARBORN STREET, 32ND FLOOR CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3123952100 MAIL ADDRESS: STREET 1: 131 S. DEARBORN STREET, 32ND FLOOR CITY: CHICAGO STATE: IL ZIP: 60603 SC 13D/A 1 v152904_sc13d-a.htm Unassociated Document

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D
(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)

Under the Securities Exchange Act of 1934
(Amendment No. 10)*

E*TRADE Financial Corporation
(Name of Issuer)

Common Stock, $0.01 par value
(Title of Class of Securities)

269246104
(CUSIP Number)

John C. Nagel
Citadel Investment Group, L.L.C.
131 S. Dearborn Street, 32nd Floor
Chicago, Illinois 60603
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

June 17, 2009
(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. £

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 
 
CUSIP No. 269246104
  
Page 2 of 18 Pages


1
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
 
Citadel Limited Partnership
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP    
(a)S
(b)£
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
AF
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
£
 
6
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
0
8
SHARED VOTING POWER
180,072,820 shares
9
SOLE DISPOSITIVE POWER
0
10
SHARED DISPOSITIVE POWER
See Row 8 above.
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
    £
See Row 8 above.
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
    £
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1 percent1
14
TYPE OF REPORTING PERSON
PN, HC

1 See Item 3 and Item 5 below.
 

CUSIP No. 269246104
  
Page 3 of 18 Pages
 

1
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
 
Citadel Investment Group, L.L.C.
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP     
(a)S
(b)£
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
AF
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)     
£
 
6
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
0
8
SHARED VOTING POWER
180,072,820 shares
9
SOLE DISPOSITIVE POWER
0
10
SHARED DISPOSITIVE POWER
See Row 8 above.
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON    
£
See Row 8 above.
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
£
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1 percent2
14
TYPE OF REPORTING PERSON
OO, HC
 
2 See Item 3 and Item 5 below.
 
 
CUSIP No. 269246104
  
Page 4 of 18 Pages


1
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
 
Kenneth Griffin
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP    
(a)S
(b)£
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
AF
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)     
£
 
6
CITIZENSHIP OR PLACE OF ORGANIZATION
United States
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
0
8
SHARED VOTING POWER
180,072,820 shares
9
SOLE DISPOSITIVE POWER
0
10
SHARED DISPOSITIVE POWER
See Row 8 above.
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
£
See Row 8 above.
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
£
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1 percent3
14
TYPE OF REPORTING PERSON
IN, HC
 

CUSIP No. 269246104
  
Page 5 of 18 Pages

1
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
 
Citadel Equity Fund Ltd.
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP    
(a)S
(b)£
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
WC
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)     
£
 
6
CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
0
8
SHARED VOTING POWER
180,072,820 shares
9
SOLE DISPOSITIVE POWER
0
10
SHARED DISPOSITIVE POWER
See Row 8 above.
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
£
See Row 8 above.
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES    
£
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1 percent4
14
TYPE OF REPORTING PERSON
CO

4 See Item 3 and Item 5 below.
 

CUSIP No. 269246104
  
Page 6 of 18 Pages
 
1
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
 
Citadel Derivatives Group LLC
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP    
(a)S
(b)£
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
WC
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)     
£
 
6
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
0
8
SHARED VOTING POWER
180,072,820 shares
9
SOLE DISPOSITIVE POWER
0
10
SHARED DISPOSITIVE POWER
See Row 8 above.
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON    
£
See Row 8 above.
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
£
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1 percent5
14
TYPE OF REPORTING PERSON
OO, BD
5 See Item 3 and Item 5 below.
 

CUSIP No. 269246104
  
Page 7 of 18 Pages

1
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
 
Citadel Derivatives Trading Ltd.
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP    
(a)S
(b)£
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
WC
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) 
£
 
6
CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
0
8
SHARED VOTING POWER
180,072,820 shares
9
SOLE DISPOSITIVE POWER
0
10
SHARED DISPOSITIVE POWER
See Row 8 above.
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON    
£
See Row 8 above.
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES    
£
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1 percent6
14
TYPE OF REPORTING PERSON
CO
6 See Item 3 and Item 5 below.
 

CUSIP No. 269246104
  
Page 8 of 18 Pages

1
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
 
Citadel Advisors LLC
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP     
(a)S
(b)£
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
AF
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)     
£
 
6
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
0
8
SHARED VOTING POWER
180,072,820 shares
9
SOLE DISPOSITIVE POWER
0
10
SHARED DISPOSITIVE POWER
See Row 8 above.
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON    
£
See Row 8 above.
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES    
£
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1 percent7
14
TYPE OF REPORTING PERSON
OO, HC
7 See Item 3 and Item 5 below.
 

CUSIP No. 269246104
  
Page 9 of 18 Pages

1
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
 
Wingate Capital Ltd.
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP    
(a)S
(b)£
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
AF
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)     
£
 
6
CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
0
8
SHARED VOTING POWER
180,072,820 shares
9
SOLE DISPOSITIVE POWER
0
10
SHARED DISPOSITIVE POWER
See Row 8 above.
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
£
See Row 8 above.
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES    
£
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1 percent8
14
TYPE OF REPORTING PERSON
CO
8 See Item 3 and Item 5 below.
 

CUSIP No. 269246104
  
Page 10 of 18 Pages

1
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
 
Citadel Holdings I LP
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP     
(a)S
(b)£
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
AF
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)     
£
 
6
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
0
8
SHARED VOTING POWER
180,072,820 shares
9
SOLE DISPOSITIVE POWER
0
10
SHARED DISPOSITIVE POWER
See Row 8 above.
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON    
£
See Row 8 above.
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES    
£
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1 percent9
14
TYPE OF REPORTING PERSON
PN, HC
9 See Item 3 and Item 5 below.
 

CUSIP No. 269246104
  
Page 11 of 18 Pages

1
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
 
Citadel Holdings II LP
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP     
(a)S
(b)£
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
AF
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)     
£
 
6
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
0
8
SHARED VOTING POWER
180,072,820 shares
9
SOLE DISPOSITIVE POWER
0
10
SHARED DISPOSITIVE POWER
See Row 8 above.
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON    
£
See Row 8 above.
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES    
£
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1 percent10
14
TYPE OF REPORTING PERSON
PN, HC
10 See Item 3 and Item 5 below.
 

CUSIP No. 269246104
  
Page 12 of 18 Pages

1
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
 
Citadel Investment Group II, L.L.C.
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP     
(a)S
(b)£
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
AF
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)     
£
 
6
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
0
8
SHARED VOTING POWER
180,072,820 shares
9
SOLE DISPOSITIVE POWER
0
10
SHARED DISPOSITIVE POWER
See Row 8 above.
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON    
£
See Row 8 above.
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES    
£
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.1 percent11
14
TYPE OF REPORTING PERSON
OO, HC
11 See Item 3 and Item 5 below.
 
 
CUSIP No. 269246104
  
Page 13 of 18 Pages

ITEM 1.
 SECURITY AND ISSUER

This Amendment No. 10 amends the Schedule 13D filed on December 17, 2007 (the "Original Filing") by Citadel Limited Partnership ("CLP"), Citadel Investment Group, L.L.C. ("CIG"), Kenneth Griffin ("Griffin"), Citadel Equity Fund Ltd. ("CEF"), Citadel Derivatives Group LLC ("CDG"), Citadel Derivatives Trading Ltd. ("CDT"), Wingate Capital Ltd. ("Wingate"), and Citadel AC Investments Ltd. ("CAC") relating to the Common Stock, $0.01 par value, of E*TRADE Financial Corporation, as amended by Amendment No. 1 to Schedule 13D filed on January 18, 2008 ("Amendment No. 1"), Amendment No. 2 to Schedule 13D filed on February 27, 2008 ("Amendment No. 2"), Amendment No. 3 to Schedule 13D filed on March 10, 2008 ("Amendment No. 3"), Amendment No. 4 to Schedule 13D filed on April 1, 2008 ("Amendment No. 4"), Amendment No. 5 to Schedule 13D filed on April 4, 2008 ("Amendment No. 5"), Amendment No. 6 to Schedule 13D filed on May 6, 2008 ("Amendment No. 6"), Amendment No. 7 to Schedule 13D filed on May 14, 2008 ("Amendment No. 7"), Amendment No. 8 to Schedule 13D filed on May 27, 2008 ("Amendment No. 8") and Amendment No. 9 to Schedule 13D filed on June 10, 2009 ("Amendment No. 9" and, together with the Original Filing, Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4, Amendment No. 5, Amendment No. 6, Amendment No. 7, and Amendment No. 8, the "Prior Filing") by CLP, CIG, Griffin, CEF, CDG, CDT, CAC, Citadel Advisors LLC ("Citadel Advisors"), Citadel Holdings I LP ("CH-I"), Citadel Holdings II LP ("CH-II"), and Citadel Investment Group II, L.L.C. ("CIG-II"). Capitalized terms not defined herein shall have the meaning given to them in the Prior Filing.
 
ITEM 2.
 IDENTITY AND BACKGROUND
 
Item 2 of the Prior Filing is amended by deleting the first paragraph and substituting in its place the following:

The persons filing this Amendment No. 10 are CLP, CIG, Griffin, CEF, Wingate, CDG, CDT, Citadel Advisors, CH-I, CH-II and CIG-II. For purposes of this Amendment No. 10, CLP, CIG, Griffin, CEF, Wingate, CDG, CDT, Capital Advisors, CH-I, CH-II and CIG-II constitute the "Reporting Persons".12

Item 2 of the Prior Filing is further amended by adding after the end of the eighth paragraph thereof the following:
 
Wingate is a private investment fund and a subsidiary of CW and Citadel Advisors. The name, residence or business address, present principal occupation or employment and citizenship of each director and executive officer of Wingate is set forth on the Amendment to Exhibit 99.2 attached hereto. CW does not have any control over the voting or disposition of securities held by Wingate.
 
ITEM 3.
 SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
 
Item 3 of the Prior Filing is amended by adding after the end of the ninth paragraph thereof the following:

On June 17, 2009, the Issuer announced a registered underwritten public offering of its Common Stock (the "Public Equity Offering").  On the same date, CEF and the Issuer entered into an Exchange Agreement (the "Exchange Agreement"), as amended by Amendment No. 1 to the Exchange Agreement on June 22, 2009 (the “Amendment to the Exchange Agreement”, and together with the Exchange Agreement, the "Amended Exchange Agreement"), pursuant to which CEF agreed with the Issuer that CEF would place an order in the Public Equity Offering to purchase $50 million of the Issuer's Common Stock (if the public offering price is greater than $1.20) or $100 million of the Issuer's Common Stock (if the public offering price is $1.20 or less).  Under the Amended Exchange Agreement, CEF may assign all or any portion of its rights and obligations to any affiliate under common control with CEF. CEF assigned to Wingate the right under the Amended Exchange Agreement to place an order in the Public Equity Offering to purchase a portion of the shares of the Issuer's Common Stock that CEF agreed to purchase under the Amended Exchange Agreement. On June 18, 2009, (i) the underwriters priced the Public Equity Offering at $1.10 per share, and (ii) the underwriters accepted CEF's order to purchase $50 million of Common Stock and Wingate's order to purchase $50 million of Common Stock.
12 For purposes of the Original Filing, CIG, Griffin, CEF, CDG, CDT, CAC and Wingate constituted the "Reporting Persons". As described in Item 6, Wingate assigned all of its Common Stock and all of its rights to acquire Common Stock to CAC. As a result, Wingate ceased being the beneficial owner of any Common Stock on or about November 29, 2007; however, Wingate again became a Reporting Person in connection with Amendment No. 10.  For purposes of Amendment No. 1 through Amendment No. 9, CLP, CIG, Griffin, CEF, CAC, CDG, CDT, Citadel Advisors, CH-I, CH-II and CIG-II constituted the "Reporting Persons". As described in Item 3 below, CAC distributed all of its Common Stock to CEF, its direct parent.  As a result, CAC ceased being the beneficial owner of any Common Stock on or about October 13, 2008.
 

 
CUSIP No. 269246104
  
Page 14 of 18 Pages
 
On June 17, 2009, the Issuer also announced its intention to commence an offer to exchange (the "Debt Exchange") its 8% Notes and a portion of its Springing Lien Notes for zero-coupon Senior Convertible Debentures due 2019 (the "Debentures"), subject to certain closing conditions (including receipt of gross proceeds from the Public Equity Offering of at least $350 million before underwriting discounts and expenses).  Pursuant to the Amended Exchange Agreement, CEF, among other things, agreed to tender in the period expiring at midnight New York City time on  July 1, 2009, or such later date as set by the Issuer with CEF’s prior written consent (the "Early Tender Period") not less than $200 million aggregate principal amount of the 8% Notes and not less than $600 million, nor more than $1 billion, aggregate principal amount of the Springing Lien Notes (together with the 8% Notes, the "Tendered Notes"), and not withdraw any of these Tendered Notes (except as set forth in the Amended Exchange Agreement), for an equal aggregate principal amount of Debentures on the same terms as the other holders of the Tendered Notes.  No separate consideration will be paid to the Issuer for the issuance of the Debentures.
 
ITEM 4.
 PURPOSE OF TRANSACTION

Item 4 of the Prior Filing is amended by deleting the first paragraph and substituting in its place the following:

The Reporting Persons purchased the Common Stock, options on the Common Stock (the "Options"), the Springing Lien Notes, the 7.375% Notes, the 7.875% Notes and the 8% Notes, and have agreed to exchange the Tendered Notes for the Debentures, for investment purposes or, insofar as certain of the Common Stock and Options are concerned, as part of their market making business.  On November 29, 2007, in connection with entering into the Investment Agreement, the Issuer and American Stock Transfer & Trust Company, as rights agent (the "Rights Agent"), entered into the First Amendment to the Rights Agreement (the "First Rights Agreement Amendment"). The First Rights Agreement Amendment modifies the Issuer's Rights Agreement, dated as of July 9, 2001 (the "Rights Agreement"), to provide, among other things, that the issuance of rights under the Rights Agreement will not be triggered as a result of the transactions contemplated by the Amended Investment Agreement, including the issuance of any shares of Common Stock to Wingate or its affiliates pursuant to the Amended Investment Agreement.  In addition, on June 17, 2009, in connection with entering into the Amended Exchange Agreement, the Issuer and the Rights Agent, entered into the Second Amendment to the Rights Agreement (the "Second Rights Agreement Amendment"). The Second Rights Agreement Amendment modifies the Rights Agreement, as amended by the First Rights Agreement Amendment to provide, among other things, that the issuance of rights under the Rights Agreement will not be triggered as a result of the transactions contemplated by the Amended Exchange Agreement.  The Second Rights Agreement Amendment also provides that the issuance of rights will not be triggered by the exercise of CEF's pre-emptive rights under the Amended Exchange Agreement, any increase ownership of shares of Common Stock by CEF or its affiliates of up to 25.0 million shares (effective and contingent upon the settlement of the Debt Exchange), or the acquisition by CEF or its affiliates of additional shares of Common Stock during certain periods in the event of the Issuer's failure to satisfy certain financial conditions.

ITEM 5.
 INTEREST IN SECURITIES OF THE ISSUER
 
Item 5 of the Prior Filings is amended and restated as follows:
(a)
Number of shares: 180,072,820 shares
   
 
Percentage of shares: 17.1%13
   
(b)
Sole power to vote or direct the vote: 0 shares
13 The percentages reported in this Amendment No. 10 are based upon 1,050,352,215 shares of Common Stock outstanding as of June 19, 2009 after the Public Equity Offering, as reported in the Prospectus Supplement filed by the Issuer on June 19, 2009.
 

CUSIP No. 269246104
  
Page 15 of 18 Pages
 
   
 
Shared power to vote or direct the vote: 180,072,820 shares
   
 
Sole power to dispose or to direct the disposition: 0 shares
   
 
Shared power to dispose or direct the disposition: 180,072,820 shares
   
(c)
With the exception of the transactions specifically disclosed in Item 3 and Item 6 of Amendment No. 10 (the Common Stock purchased in the Public Equity Offering and the Collar entered into in connection therewith), the Reporting Persons have entered into no transactions with respect to the Common Stock of the Issuer since the date of Amendment No. 9.
   
(d)
Not applicable.
   
(e)
Not applicable.
   
 
ITEM 6.
 CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
 
Item 6 of the Prior Filing is amended by deleting the last sentence of the eighth paragraph and substituting in its place the following:

In addition, as noted in Item 4, on November 29, 2007, in connection with entering into the Investment Agreement, the Issuer and the Rights Agent entered into the First Rights Agreement Amendment, and on June 17, 2009, as contemplated in the Amended Exchange Agreement, the Issuer and the Rights Agent entered into the Second Rights Agreement Amendment.  The Second Rights Agreement Amendment is attached as Exhibit 99.25 and incorporated by reference herein.

Item 6 of the Prior Filing is further amended by deleting the eleventh paragraph in its entirety.

Item 6 of the Prior Filing is further amended by adding after the end of the eighteenth paragraph thereof the following:

As noted above, on June 17, 2009, CEF and the Issuer entered into the Exchange Agreement, as amended on June 22, 2009 by the Amendment to the Exchange Agreement, pursuant to which CEF (i) agreed to place an order for either $50 million or $100 million of Common Stock to be issued in the Public Equity Offering (depending on the offering price) and, (ii) contingent upon the satisfaction of certain closing conditions, to tender certain 8% Notes and Springing Lien Notes in the Debt Exchange in exchange for Debentures.  The Debentures will (i) have a ten year maturity; (ii) not bear interest; (iii) be convertible into shares of Common Stock at any time at the election of the holder into a number of shares equal to the quotient of (x) the principal amount of Debentures of such class to be converted and (y) the conversion price applicable to such Debentures immediately prior to conversion; provided that no holder may convert Debentures to the extent such conversion would result in either (A) such holder beneficially owning in excess of 9.9% of the Issuer's outstanding voting stock, or (B) such holder owning in excess of 24.9% of the Issuer's outstanding Common Stock under the OTS control rules, which limitations may be amended or waived, as applicable, upon the later of (a) one year notice to the Issuer and (b) receipt of any necessary regulatory approvals; (iv) contain customary anti-dilution provisions; and (v) will have covenants and events of default substantially similar to those of the Springing Lien Notes.  The Exchange Agreement is attached as Exhibit 99.26 and incorporated by reference herein. The Amendment to the Exchange Agreement is attached as Exhibit 99.27 and incorporated by reference herein.

The Debentures issued in the Debt Exchange will be designated as either Class A Debentures or Class B Debentures and will be identical except for the conversion price for each class of Debentures. Holders tendering the Tendered Notes in the Early Tender Period will be entitled to receive Class A Debentures in exchange for their Tendered Notes. Holders tendering their Notes in the Debt Exchange after the Early Tender Period will be entitled to receive Class B Debentures in exchange for their Tendered Notes. The initial conversion price of the Class A Debentures is $1.034.  The initial conversion price for the Class B Debentures is 150% of the initial conversion price applicable to the Class A Debentures, or $1.551.

Under the Amended Exchange Agreement, the Issuer granted CEF and its affiliates pre-emptive rights to maintain their percentage ownership of the Issuer's Common Stock, subject to certain terms, conditions and limitations.  The pre-emptive rights will be in effect so long as the Issuer has in effect a stockholder rights plan, provided that the preemptive rights shall terminate and be of no further force or effect upon the earliest to occur of (i) failure to consummate the Debt Exchange by October 31, 2009, or (ii) such time as CEF and its affiliates no longer beneficially own at least 19.9% of the Issuer's outstanding Common Stock on an as-converted basis (whether or not such securities are convertible or exchangeable for shares of Common Stock at such time in accordance with their terms or by reason of any condition precedent to such conversion or exchange not been satisfied at such time).  The preemptive rights will be suspended upon the termination of the Issuer's stockholder rights plan, but will be automatically reinstated if the Issuer reinstates its stockholder rights plan or if it subsequently adopts a new rights plan, "poison pill" or similar plan.
 

CUSIP No. 269246104
  
Page 16 of 18 Pages

In addition, the Amended Exchange Agreement contemplates that the Issuer will be seeking consents to amendments and waivers of certain provisions of the indentures governing the 8% Notes and the Springing Lien Notes, for which it will pay a customary consent fee, and a failed exchange offer consent fee if the Debt Exchange has not been consummated on or prior to October 31, 2009. By tendering their Tendered Notes in the Debt Exchange by the end of the Early Tender Period, holders will be automatically deemed to have delivered consent to each such amendment and waiver, and to have waived any consent fee, in each case as to their Tendered Notes. CEF and its affiliates have agreed to deliver consent with respect to the 8% Notes and Springing Lien Notes that they do not tender in the Debt Exchange and to waive any consent fee with respect to such Notes (but CEF and its affiliates will receive the failed exchange offer consent fee if such fee is payable) such that a majority of each class of Notes will have consented to the amendments.

Finally, in connection with the Debt Exchange, and in order to facilitate future transactions designed to increase the Issuer's equity, on June 17, 2009, the Issuer announced that it will call a Special Meeting of Stockholders to (1) increase the authorized shares of its Common Stock, (2) approve the issuance of the consideration offered to holders of Tendered Notes (including CEF and its affiliates) in the Debt Exchange and (3) approve the potential issuance of 365 million shares of Common Stock or securities convertible or exchangeable into or exercisable for, Common Stock in connection with future debt exchange transactions. In addition, the Issuer will also ask its stockholders for an advisory vote on whether to maintain its stockholder rights plan. The record date of the Special Meeting is expected to be set by the Issuer after the closing date of the Public Equity Offering and the meeting date is expected to be held as soon as practicable thereafter, based on SEC review of the proxy statement, if any, and subject to applicable law. Holders of shares of the Issuer's Common Stock on the record date, including shares of its Common Stock issued in the Public Equity Offering, will be able to vote their shares at the Special Meeting.

In connection with the Public Equity Offering aspect of the Amended Exchange Agreement, on June 17, 2009 CEF, CIG, CLP, CDG and Griffin entered into a customary lock-up agreement (the "Lock-Up Agreement")  with J.P. Morgan Securities Inc. and Sandler O'Neill & Partners, L.P., as representatives of the underwriters (the "Representatives"). The Lock-Up Agreement prohibits CEF, CIG, CLP, CDG and Griffin from taking the following actions during the period ending 90 days after the date of the prospectus relating to the Public Equity Offering: (i) transferring or disposing of, directly or indirectly, any shares of Common Stock that were beneficially owned prior to June 17, 2009 or any securities beneficially owned prior to June 17, 2009 that are convertible into or exercisable or exchangeable for Common Stock, (ii) entering into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of any shares of Common Stock beneficially owned before June 17, 2009, and (iii) without the prior written consent of  the Representatives, making any demand for or exercising any right with respect to the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock that are, in each case, beneficially owned prior to June 17, 2009, except in limited circumstances.

Also in connection with the Public Equity Offering aspect of the Amended Exchange Agreement, Wingate and CEF entered into a collar transaction described below on June 18, 2009 (the "Collar"). The Collar is composed of two components:  First, Wingate purchased from CEF, a European style, cash settled OTC option which entitles it to put up to 45,454,545 shares of Common Stock to CEF at a strike price of $1.045 per share.  Second, Wingate sold to CEF a European style, cash settled OTC option which entitles CEF to call up to 45,454,545 shares of Common Stock from Wingate at a strike price of $1.32 per share. The aggregate initial premium for the Collar was approximately $475,312 and is subject to adjustment based upon a fairness opinion to be obtained by the parties. Wingate's purpose for entering the Collar was to reduce its economic risk. CEF's purpose for entering into the Collar was to earn an attractive risk-adjusted rate of return at market prices.  The agreements constituting the Collar are attached as Exhibit 99.28 and incorporated by reference herein.


CUSIP No. 269246104
  
Page 17 of 18 Pages


The description of the terms of the Amended Investment Agreement, the Registration Rights Agreement, the Indenture, the Assignment Agreement, the Puts, the First Rights Agreement Amendment, the amendment with respect to certain CDSs dated June 17, 2008, the termination agreement with respect to certain CDSs dated October 9, 2008, the Exchange Agreement, the Amendment to the Exchange Agreement, the Second Rights Agreement Amendment, the Collar, the Lock-Up Agreement and the other documents and agreements referenced in this Item 6 is a summary, does not purport to be complete, and is qualified in its entirety by reference to the specific documents attached as exhibits to the Prior Filing and/or this amendment to Schedule 13D, and each of which is incorporated herein by reference.14
 
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
 
The following documents are filed as appendices and exhibits (or incorporated by reference herein):
 
Exhibit 99.2:
Amendment to List of Directors and Executive Officers of Reporting Persons
Exhibit 99.25:
Second Amendment to the Rights Agreement, dated June 17, 2009, by and between the Issuer and American Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 to the Issuer's Form 8-K as filed with the Securities and Exchange Commission on June 17, 2009)
Exhibit 99.26:
Exchange Agreement, dated as of June 17, 2009, by and between Citadel Equity Fund Ltd. and E*TRADE Financial Corporation (incorporated by reference to Exhibit 10.1 to the Issuer's Form 8-K as filed with the Securities and Exchange Commission on June 17, 2009)
Exhibit 99.27
Amendment No. 1, dated June 22, 2009, to the Exchange Agreement by and between Citadel Equity Fund Ltd. and E*TRADE Financial Corporation, dated June 17, 2009
Exhibit 99.28
Agreements Constituting Collar

14 The documents and agreements attached as exhibits to the Prior Filing and/or this amendment have been included with and filed as an exhibit to this amendment to Schedule 13D to provide information regarding the terms of such documents or agreements and are not intended to modify or supplement any factual disclosures about the Issuer, CEF or the affiliates of either in the Reporting Person's public reports filed with the SEC. In particular, such documents and agreements and the related summaries are not intended to be, and should not be relied upon as, disclosures regarding any facts and circumstances relating to the Issuer, CEF or the affiliates of either. The representations, warranties and covenants contained in any such document and agreement (i) was made only for purposes of that document or agreement and as of specific dates, (ii) was solely for the benefit of the parties to such document or agreement, (iii) may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties thereto instead of establishing these matters as facts, and (iv) may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors.
 

CUSIP No. 269246104
  
Page 18 of 18 Pages

Signature
 
After reasonable inquiry and to the best of its knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct.

Dated this 22nd day of June, 2009


CITADEL LIMITED PARTNERSHIP
  
CITADEL INVESTMENT GROUP, L.L.C. 
         
By:
Citadel Investment Group, L.L.C.,
  
By:  
/s/ John C. Nagel
 
its General Partner
    
John C. Nagel, Authorized Signatory
         
By:
/s/ John C. Nagel
      
 
John C. Nagel, Authorized Signatory
      
         
CITADEL EQUITY FUND LTD.
  
CITADEL DERIVATIVES GROUP LLC
         
By:
Citadel Limited Partnership,
  
By:
Citadel Limited Partnership,
 
its Portfolio Manager
    
its Managing Member
         
By:
Citadel Investment Group, L.L.C.,
  
By:
Citadel Investment Group, L.L.C.,
 
its General Partner 
    
its General Partner 
         
By:
/s/ John C. Nagel 
  
By:
/s/ John C. Nagel
 
John C. Nagel, Authorized Signatory
    
John C. Nagel, Authorized Signatory
         
KENNETH GRIFFIN
  
CITADEL DERIVATIVES TRADING LTD
         
By:
/s/ John C. Nagel
  
By:
Citadel Limited Partnership,
 
John C. Nagel, attorney-in-fact15
    
its Portfolio Manager
         
     
By:
Citadel Investment Group, L.L.C.,
       
its General Partner 
         
     
By:
/s/ John C. Nagel
       
John C. Nagel, Authorized Signatory
         
CITADEL ADVISORS LLC
  
WINGATE CAPITAL LTD
         
By:
Citadel Holdings II LP,
  
By:
Citadel Limited Partnership,
 
its Managing Member
    
its Portfolio Manager
         
By:
Citadel Investment Group II, L.L.C.,
  
By:
Citadel Investment Group, L.L.C.,
 
its General Partner 
    
its General Partner 
         
By:
/s/ John C. Nagel
  
By:
/s/ John C. Nagel
  John C. Nagel, Authorized Signatory      
John C. Nagel, Authorized Signatory
         
CITADEL HOLDINGS II LP
  
CITADEL HOLDINGS I LP
         
By:
Citadel Investment Group II, L.L.C.,
  
By:
Citadel Investment Group II, L.L.C.,
 
its General Partner 
    
its General Partner 
         
By:
/s/ John C. Nagel
  
By:
/s/ John C. Nagel
 
John C. Nagel, Authorized Signatory  
   
John C. Nagel, Authorized Signatory
         
   
CITADEL INVESTMENT GROUP II, L.L.C. 
         
 
 
  
By:
/s/ John C. Nagel
 
 
    
John C. Nagel, Authorized Signatory

15 John C. Nagel is signing on behalf of Kenneth Griffin as attorney-in-fact pursuant to a power of attorney previously filed with the Securities and Exchange Commission on February 24, 2006, and hereby incorporated by reference herein. The power of attorney was filed as an attachment to a filing by Citadel Limited Partnership on Schedule 13G for Morgans Hotel Group Co.
 
 EX-99.2 2 v152904_ex99-2.htm Unassociated Document
 
Amendment to EXHIBIT 99.2
 
 
Directors and Officers of Citadel Derivatives Trading Ltd.
 
The name, title, present principal occupation or employment, residence or business address and citizenship of each of the directors and executive officers of Citadel Derivatives Trading Ltd. (“CDT”) are set forth below.
 
Name and Citizenship
Title at CDT
Present Principal Occupation and Residence or Business Address
(Principal Business of Employer)
Adam C. Cooper
United States
Director
Senior Managing Director and General Counsel
Citadel Investment Group, L.L.C.
131 South Dearborn
Chicago, IL 60603
Clarendon Hugh “Hal” Masters
British Overseas Territories
Director
Company director
46 Pitt’s Bay Road
Pembroke, HM 06, Bermuda
 
 
Directors and Executive Officers of Wingate Capital Ltd.
 
The name, title, present principal occupation or employment, residence or business address and citizenship of each of the directors and executive officers of Wingate Capital Ltd. (“Wingate”) are set forth below.
 
Name and Citizenship
Title at Wingate
Present Principal Occupation and Residence or Business Address
(Principal Business of Employer)
Adam C. Cooper
United States
Director and Assistant Secretary
Senior Managing Director and General Counsel
Citadel Investment Group, L.L.C.
131 South Dearborn
Chicago, IL 60603
Austin John O’Connor
United Kingdom
 
Director and Vice President
Company director
4 rue de l’eglise
Wormeldange, Luxembourg L-5481
Clarendon Hugh “Hal” Masters
British Overseas Territories
Director
Company director
46 Pitt’s Bay Road
Pembroke, HM 06, Bermuda
     
EX-99.27 3 v152904_ex99-27.htm Unassociated Document
EXHIBIT 99.27
 
Execution Version

 
AMENDMENT NO. 1 TO EXCHANGE AGREEMENT

 
This AMENDMENT NO. 1, dated as of June 22, 2009 (this “Amendment”), between E*TRADE Financial Corporation, a Delaware corporation (the “Company”), and Citadel Equity Fund Ltd., a Cayman Islands company (together with any of its permitted assignees pursuant to the Exchange Agreement, “CEFL”) amends that certain Exchange Agreement, dated as of June 17, 2009 (the “Exchange Agreement”), between the Company and CEFL.
 
RECITALS
 
WHEREAS, the Company and CEFL are parties to the Exchange Agreement; and
 
WHEREAS, Section 6.8 of the Exchange Agreement provides that the Exchange Agreement may be amended or modified in whole or in part at any time by an agreement in writing between the Company and CEFL executed in the same manner as the Exchange Agreement.
 
NOW, THEREFORE, in consideration of the premises and agreements set forth herein and in the Exchange Agreement, the parties agree as follows:
 
ARTICLE I
 
AMENDMENTS
 
1.1 Offer Document; Exhibit B. CEFL and the Company hereby agree that the Offer to Exchange attached as Exhibit B to this Amendment shall be the Offer Document as defined in the Exchange Agreement.
 
1.2 Amendment to Section 1.1. The following definition is added to Section 1.1 after the definition of "Exchange Offer":
 
““Failed Exchange Offer Consent Fee" shall have the meaning set forth in Section 4.10(c).”
 
1.3 Amendment to Section 4.10(a). The first sentence of Section 4.10(a) of the Exchange Agreement is hereby amended and restated in its entirety as follows:
 
“The Company shall commence the Exchange Offer on June 22, 2009.”
 
1.4 Amendment to Section 4.10(b). The first and second sentences of Section 4.10(b) of the Exchange Agreement are hereby amended and restated in their entirety and a new third sentence is added as follows:
 
“The Early Tender Period shall expire at 12:00 midnight New York City time on July 1, 2009, or such later date as set by the Company with CEFL’s prior written consent (the “Early
 
 
Tender Period”). At or around 6:00 p.m. New York City time on the day the Early Tender Period expires, the Company shall make a preliminary public announcement of the aggregate principal amount of 2011 Notes and Springing Lien Notes tendered, and not withdrawn, during the Early Tender Period up to the time of such announcement. Following such announcement, the Company shall, if requested by any holder tendering 2011 Notes and/or Springing Lien Notes or delivering notices of guaranteed delivery in respect thereof after such announcement and prior to the expiration of the Early Tender Period, promptly confirm receipt of such tenders or notices, as applicable, to such holder.”
 
1.5 Amendment to Section 4.10(c).   Section 4.10(c) of the Exchange Agreement is hereby amended and restated in its entirety as follows:
 
“The Company shall use its reasonable best efforts to solicit and obtain valid and binding consents from (i) all holders of Springing Lien Notes approving the Company’s proposals to (x) amend the definition of "Change of Control" in the indenture governing the Springing Lien Notes to make clause (1) of such definition consistent with the analogous provision in the indentures relating to the 2011 Notes and the Company’s 7.375% Senior Notes due 2013 and 7.875% Notes due 2015; provided, that if the Company does not receive such consent, the amount of Springing Lien Notes that may be exchanged by CEFL in the Exchange Offer shall be limited as set forth in the Offer Document such that, following the Closing, CEFL and its Affiliates shall not own more than 49.9% of the fully diluted Common Stock of the Company (assuming full conversion of all Convertible Debentures held by CEFL and its Affiliates whether or not such Convertible Debentures can be converted pursuant to their terms) and (y) amend the “Limitation of Restricted Payments” covenant in the in the indenture governing the Springing Lien Notes to exempt any payment of dividends on any preferred stock issued to the United States Treasury, or any redemption or repurchase of any preferred stock or any warrants issued to the United States Treasury with the proceeds of certain qualifying issuances of capital stock, in each case, pursuant to a CPP Transaction and (ii) all holders of 2011 Notes approving the Company’s proposal to amend the “Limitation of Restricted Payments” covenant in the indenture governing the 2011 Notes to exempt any payment of dividends on any preferred stock issued to the United States Treasury, or any redemption or repurchase of any preferred stock or any warrants issued to the United States Treasury with the proceeds of certain qualifying issuances of capital stock, in each case, pursuant to a CPP Transaction. The Company shall pay, in accordance with the terms and conditions set forth in the Offer Document, to each holder of 2011 Notes and/or Springing Lien Notes who validly delivers and does not revoke a consent to the amendments contemplated by this Section 4.10(c) prior to the expiration of the Early Tender Period, a cash payment equal to $5.00 for each $1,000 in principal amount of 2011 Notes or Springing Lien Notes in respect of which such consent has been validly delivered (the “Consent Fee”); provided, however, all holders who tender Springing Lien Notes and 2011 Notes in the Exchange Offer shall be deemed to have consented to the amendments contemplated by this Section 4.10(c) and to have waived the Consent Fee with respect to all 2011 Notes and Springing Lien Notes tendered by such holders in the Exchange Offer; and provided, further, that if (i) the Company has paid the Consent Fee in respect of which consents have been delivered and (ii) the Exchange Offer has not been consummated on prior to October 31, 2009 or this Agreement has been earlier terminated in accordance with its terms, then the Company shall pay to each holder

2
 
of 2011 Notes and/or Springing Lien Notes that validly tendered 2011 Notes and/or Springing Lien Notes in the Exchange Offer (including, for the avoidance of doubt, CEFL) an amount in cash equal to the Consent Fee for each $1,000 in principal amount of 2011 Notes or Springing Lien Notes that have been validly tendered by such holder in the Exchange Offer, notwithstanding that tendered 2011 Notes and Springing Lien Notes have not been accepted by the Company in the Exchange Offer by reason of the failure of the Exchange Offer to be consummated (the “Failed Exchange Offer Consent Fee”). Unless this Agreement has been terminated pursuant to Section 5.1, CEFL hereby agrees that it shall affirmatively consent by tendering the CEFL Exchanged Notes held by it, and cause each of its respective Affiliates who are holders of 2011 Notes or Springing Lien Notes to consent by tendering the CEFL Exchanged Notes held by it, to the amendments contemplated by this Section 4.10(c). CEFL hereby agrees to waive the Consent Fee with respect to its 2011 Notes and Springing Lien Notes, whether or not such Notes are tendered in the Exchange Offer; provided, however, that CEFL shall receive the Failed Exchange Offer Consent Fee if such fee is payable. Unless this agreement has been terminated pursuant to Section 5.1, CEFL hereby agrees that it shall, and shall cause its Affiliates who are holders of 2011 Notes or Springing Lien Notes to, affirmatively consent to the amendments contemplated by this Section 4.10(c) by submitting consents in respect of all 2011 Notes and Springing Lien Notes such that CEFL shall have ensured that more than 50% of the 2011 Notes and the Springing Lien Notes have submitted consents. At such time as CEFL shall have satisfied its obligations with respect to the consents contemplated by this Section 4.10(c), CEFL shall be permitted to freely transfer, sell or assign any Springing Lien Notes not tendered.”
 
ARTICLE II
 
MISCELLANEOUS
 
2.1 Effect of Amendment. Except as expressly set forth herein, the Exchange Agreement shall not by implication or otherwise be supplemented or amended by virtue of this Amendment, but shall remain in full force and effect, as amended hereby. This Amendment shall be construed in accordance with and as a part of the Exchange Agreement, and all terms, conditions, representations, warranties, covenants and agreements set forth in the Exchange Agreement and each other instrument or agreement referred to therein, except as herein amended, are hereby ratified and confirmed. To the extent that there is a conflict between the terms and provisions of the Exchange Agreement and this Amendment, the terms and provisions of this Amendment shall govern for purposes of the subject matter of this Amendment only.
 
2.2 Waiver of Notice. The Company and CEFL hereby waive any notice requirement with respect to each other under the Exchange Agreement, if any, pertaining to the matters covered by this Amendment.
 
2.3 Counterparts and Facsimile. This Amendment may be executed in one or more counterparts, each of which shall be deemed to constitute an original, but all of which together shall constitute one and the same document. Executed signature pages to this Amendment may be delivered by facsimile and such facsimiles will be deemed as sufficient as if actual signature pages had been delivered.

3
 
2.4 Governing Law. This Amendment shall be governed by, and interpreted in accordance with, the laws of the State of New York.
 
2.5 Headings. The headings of Articles and Sections contained in this Amendment are for reference purposes only and are not part of this Amendment.
 
2.6 Severability. If any provision of this Amendment is determined to be invalid, illegal or unenforceable, the remaining provisions of this Amendment shall remain in full force and effect; provided that the economic and legal substance of any of the Transactions is not affected in any manner materially adverse to any party. In the event of any such determination, the parties agree to negotiate in good faith to modify this Amendment to fulfill as closely as possible the original intent and purpose hereof. To the extent permitted by law, the parties hereby to the same extent waive any provision of law that renders any provision hereof prohibited or unenforceable in any respect.
 
2.7 Definitions. Capitalized terms used by not defined herein shall have the respective meanings ascribed to them in the Exchange Agreement
 
* * *
 
4
 
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by the duly authorized officers of the parties hereto as of the date first herein above written.
 
 
E*TRADE FINANCIAL CORPORATION
   
 
By: /s/ Donald H. Layton                 
 
Name:
 
Title:
   
   
 
CITADEL EQUITY FUND LTD.
   
 
By: Citadel Advisors LLC, its Portfolio Manager
   
 
By:                                                         
 
Name:
 
Title:
 
 
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by the duly authorized officers of the parties hereto as of the date first herein above written.
 
 
E*TRADE FINANCIAL CORPORATION
   
 
By:                                                        
 
Name:
 
Title:
   
   
 
CITADEL EQUITY FUND LTD.
   
 
By: Citadel Advisors LLC, its Portfolio Manager
   
 
By: /s/ John Nagel                               
 
Name: JOHN NAGEL
 
Title: Authorized Signatory
 
 EX-99.28 4 v152904_ex99-28.htm Unassociated Document
EXHIBIT 99.28

DATE:
June 18, 2009
 
TO:
Citadel Equity Fund Ltd. (“CEFL”)
 
FROM:
Wingate Capital Ltd. (“WING”)
 
RE:
CONFIRMATION OF PERFORMANCE COLLAR TRANSACTION

Dear Sir or Madam:
 
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions of the Transaction entered into between WING and CEFL on the Trade Date specified below (the “Transaction”). This communication constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below.

This Confirmation hereby incorporates by reference the 2006 ISDA Definitions (the “Swap Definitions”), and in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together with the Swap Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. In the event of any inconsistency between the Swap Definitions and the Equity Definitions, the Equity Definitions will govern. In the event of any inconsistency between either set of Definitions and this Confirmation, this Confirmation will govern.

This Confirmation evidences a complete and binding agreement between you and us as to the terms of the Transaction to which this Confirmation relates. Except as otherwise provided herein, this Confirmation (together with all other documents confirming transactions between them which contemplate that the parties will enter into an ISDA Master Agreement) shall be subject to and form a part of an agreement in the form of a 1992 ISDA Master Agreement together with the 1994 ISDA Credit Support Annex (Bilateral Form, subject to New York law) with the Paragraph 13 elections set forth in “Additional Provisions” below (the “CSA”) as if CEFL and WING had executed an agreement in such form (but without any Schedule) on the Effective Date of this Transaction, with the election of the following terms: (1) the laws of the State of New York as the governing law: (2) U.S. Dollars as the Termination Currency; and (3) for purposes of Section 6(e) of the Agreement, Market Quotation and Second Method will apply, (4) the following Additional Termination Event will apply with WING as the sole Affected Party: the NAV of WING’s Credit Support Provider as of any NAV Determination Date shall be less than USD 500,000,000, (5) the following Additional Termination Event will apply with CEFL as the sole Affected Party: the NAV of CEFL as of any NAV Determination Date shall be less than USD 2,000,000,000, (6) the CSA shall be a Credit Support Document with respect to CEFL and WING, and (7) the Guaranty of WING by Citadel Wellington LLC shall be a Credit Support Document with respect to WING (hereinafter the “Agreement”). The “NAV of CEFL” means an amount equal to the NAV of CEFL as of the applicable NAV Determination Date as determined by the Calculation Agent. The “NAV of WING’s Credit Support Provider” means an amount equal to the NAV of Citadel Wellington LLC as of the applicable NAV Determination Date as determined by the Calculation Agent. “NAV Determination Date” means the last calendar day of each month. “NAV” means total assets minus total liabilities (measured according to generally accepted accounting principles consistently applied).
 
In the event of any inconsistency between the provisions of the Agreement and this Confirmation, this Confirmation will prevail for the purposes of this Transaction.
 
The terms of the particular Transaction to which this Confirmation relates are as follows:
 
General Terms:
 
Trade Date:
June 18, 2009.
 
Effective Date:
June 18, 2009.
 
Scheduled Termination Date:
June 17, 2010.
 
 
Termination Date:
The earlier of (i) the Scheduled Termination Date, and (ii) the Optional Termination Date as of which the Notional Amount is zero (0).
 
Optional Early Termination:
This Transaction may be terminated in whole or in part by mutual agreement of the parties as of any Optional Termination Date.
 
Optional Termination Date:
The penultimate Business Day of each calendar month during the Term.
 
Calculation Agent:
Citadel Advisors LLC.
 
Business Days:
New York.
 
Reference Shares:
45,454,545 common shares of E*Trade Financial Corporation (ETFC).
 
Initial Exchange:
 
Initial Exchange Amount:
USD 475,312 (the “Preliminary Initial Exchange Amount”). The Preliminary Initial Exchange Amount was calculated by the Calculation Agent utilizing a fair market value with respect to the Reference Security of USD 1.10.
 
The Preliminary Initial Exchange Amount shall be subject to adjustment as follows:
 
As soon as reasonable practicable following the Trade Date the Calculation Agent shall solicit a fairness opinion as to the Preliminary Initial Exchange Amount from an internationally recognized expert in the valuation of the Reference Shares. The fairness opinion shall specify a range (the “Fairness Exchange Amount Range”) within which the Initial Exchange Amount must fall in order to be subject to such fairness opinion.
 
(a) If the Preliminary Initial Exchange Amount is within the Fairness Exchange Amount Range, the Preliminary Initial Exchange Amount shall be the Initial Exchange Amount with respect to this Transaction.
 
(b) If the Preliminary Initial Exchange Amount is not within the Fairness Exchange Amount Range, the Calculation Agent shall adjust the Preliminary Initial Exchange Amount by an amount (which may be a positive or negative amount) (the “Exchange Adjustment Amount”) equal to the amount required such that the aggregate of the Preliminary Initial Exchange Amount and the Exchange  Adjustment Amount (the “Adjusted Preliminary Initial Exchange Amount”) is an amount equal to the median of the Fairness Exchange Amount Range, and the Adjusted Preliminary Initial Exchange Amount shall be the Initial Exchange Amount with respect to this Transaction.
 
Initial Exchange Amount Payer:
WING.
 
Initial Exchange Date:
June 18, 2009.
 
 
Performance Collar Payment Amounts:
 
Final Price:
With respect to a Valuation Date, the closing price of the Reference Shares on the Relevant Exchange.
 
Relevant Exchange:
NASDAQ.
 
WING Payment Amount:
With respect to  a Payment Date,  if as  of the Valuation Date related to such Payment Date, (1) the Final Price is greater than the WING Reference Price, the WING Payment Amount shall be the product of (i) the Notional Amount, and (ii) the difference between (a) the Final Price, and (b) the WING Reference Price, or (2) the Final Price is less than or equal to the WING Reference Price, the WING Payment Amount shall be zero (0).
 
WING Reference Price:
USD 1.32.
 
WING Notional Amount:
USD 60,000,000.
 
CEFL Payment Amount:
With respect to a Payment Date, if as of the Valuation Date related to such Payment Date, (1) the Final Price is less than the CEFL Reference Price, the CEFL Payment Amount shall be the product of (i) the Notional Amount, and (ii) the difference between (a) the CEFL Reference Price, and (b) the Final Price, or (2) the Final Price is greater than or equal to the CEFL Reference Price, the CEFL Payment Amount shall be zero (0).
 
CEFL Reference Price:
USD 1.045.
 
CEFL Notional Amount:
USD 47,500,000.
 
Valuation Dates:
The penultimate Business Day of each calendar month during the Term, and the Termination Date.
 
Payment Dates:
Three Business  Days  following each  Valuation Date.

Additional Provisions:
 
Share Adjustments:
 
Method of Adjustment:
Calculation Agent Adjustment

Extraordinary Events:
 
Consequences of Merger Events:
 
Share-for-Share:
Calculation Agent Adjustment
 
Share-for-Other:
Calculation Agent Adjustment
 
Share-for-Combined:
Calculation Agent Adjustment
 
Tender Offer:
Applicable
 
Consequences of Tender Offers:
 
Share-for-Share:
Calculation Agent Adjustment
 
 
Share-for-Other:
Calculation Agent Adjustment
 
Share-for-Combined:
Calculation Agent Adjustment
 
Tender Offers:
Applicable; provided that Section 12.1(d) of the Equity Definitions is hereby amended by (a) replacing “10%” with “or equal to 50%” in the third line thereof and (b) adding “, or of the outstanding Shares,” before “of the Issuer” in the fourth line thereof. Sections 12.1(e) and 12.1(1)(ii) of the Equity Definitions are hereby amended by adding “or Shares, as applicable,” after “voting shares”
 
Calculation Agent Adjustment:
(a) The definition of “Calculation Agent Adjustment” in Sections 12.2 and 12.3 of the Equity Definitions shall be amended by deleting clause (ii) thereof and replacing it with “(ii) if the Calculation Agent determines that no adjustment that it could make under (i) will produce a commercially reasonable result, notify the parties that the relevant consequence shall be the cancellation of the portion of the Transaction represented by Affected Shares, in which case “Partial Cancellation and Payment” will be deemed to apply and any payment to be made by one party to the other shall be calculated in accordance with Section 12.7.
 
Composition of Combined Consideration:
Not Applicable
 
Nationalization, Insolvency or Delisting:
Negotiated Close-out
 
Additional Disruption Events:
 
Change in Law:
Applicable
 
Section 12.9(a)(ii) of the Equity Definitions is replaced in its entirety by the words:
 
“‘Change in Law’ means that, on or after the Trade Date of this Transaction (A) due to the adoption of or any change in any applicable law or regulation (including, without limitation, any tax law), or (B) due to the promulgation of or any change in the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law or regulation (including any action taken by a taxing authority), the Calculation Agent determines in good faith that it has become illegal for a party to this Transaction to hold, acquire or dispose of Hedge Positions relating to such Transaction, provided that this Section 12.9(a)(ii) shall not apply if the Calculation Agent determines that such party could have taken reasonable steps to avoid such illegality
 
Section 12.9(b)(i) of the Equity Definitions is hereby amended by (i) inserting the words “or partially terminate the portion of the Transaction represented by Shares affected by the Change in Law” after the word “terminate” in the third line thereof, (ii) inserting the words “or partial termination” following the word ‘‘termination” in the fourth line thereof, (iii) the insertion of the words “or relevant portion thereof after the word “Transaction” in the fifth line thereof.
 
Insolvency Filing:
Not Applicable
 
Hedging Disruption:
Not Applicable
 
Increased Cost of Hedging:
Not Applicable
 
 
Loss of Stock Borrow:
Not Applicable
 
Increased Cost of Stock Borrow:
Not Applicable
 
Determining Party:
Calculation Agent
 
Non-Reliance:
Applicable
 
Agreements and Acknowledgments
Regarding Hedging Activities:
Applicable
 
Additional Acknowledgments:
Applicable
 
Additional Provisions:
 
CSA - Paragraph 13 Elections
 
(i)
The parties intend that each party secure its obligations to the other pursuant to the Agreement and this Confirmation (the “Obligations”). The Pledgor hereby pledges to the Secured Party as security for its Obligations and grants the Secured Party a first priority continuing security interest in, lien on and right of set-off against all collateral, margin or other property transferred or delivered to Secured Party hereunder (subject to the provisions of the Communications Act and the rules and regulations of the Federal Communications Commission). For purposes of the Agreement and this Transaction, the following elections shall be deemed to constitute a Paragraph 13 - Elections and Variables for purposes of the CSA:
 
(ii)
Valuation Agent shall mean the Calculation Agent;
 
(iii)
Eligible Collateral and Valuation Percentage:
 
Cash @ 100%
 
(iv)
Threshold shall mean, with respect to each of the parties, zero;
 
(v)
Minimum Transfer Amount shall mean: USD 250,000;
 
(vi)
Independent Amount shall mean, with respect to CEFL zero; and with respect to WING zero;
 
(vii)
Delivery Amount and Return Amount will be rounded up and down to the nearest integral multiple of U.S.$10,000, respectively, or to the nearest multiple of USD 1, if no Transactions are outstanding;
 
(viii)
Valuation Date shall mean the penultimate Business Day of each calendar month during the Term;
 
(ix)
Valuation Time means the close of business on the Local Business Day before the Valuation Date;
 
(x)
Notification Time means 11:00 a.m., New York time, on a Local Business Day;
 
(xi)
Eligibility to Hold and Use Posted Collateral: CEFL and WING will be entitled to hold Posted Collateral itself or through a Custodian pursuant to Paragraph 6(b), and the provisions of Paragraph 6(c) will apply to CEFL and WING;
 
(xii)
Interest Rate means the rate per annum equal to the overnight Federal Funds Rate as reported in the Federal Reserve’s weekly statistical release designated H.15(519) (or any successor publication).
 
 
Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation and returning it to us by facsimile transmission.

 
Yours sincerely,
 

Wingate Capital Ltd.
By: Citadel Advisors LLC, its Portfolio Manager

By: /s/ John Nagel                           
Name: John Nagel
Title: Authorized Signatory
 
Accepted and confirmed as
of the Trade Date written above:
 
Citadel Equity Fund Ltd.     
By: Citadel Advisors LLC, its Portfolio Manager
 
By: /s/ John Nagel                           
Name: John Nagel
Title: Authorized Signatory
 
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